So, I have a Yule thought for you-folk. Or perhaps it's a Christmas thought. As the new depression wears on, and people begin to accept that it's going to be years before things get better, we are going to have to decide if our wealthy are going to share some of their wealth for the common good. This coming year, I think, will be the beginning of this decision.
Croak!
[minor copy error corrected after a few days.]
The Raven's first rule of health care policy: Do no harm.
Emma:
Helping 30 million Americans doesn’t [matter?]Except that the bill will also harm some number. Say it’s…well, let’s be conservative and say it’s one million. Does that matter?
This is a horrible choice, a hard and ancient ethical problem. No matter what position we take harm will be done, unless the Senate abruptly has an attack of compassion. Nor is there a clear path. For this reason I criticize no-one’s choice in this matter, save only choices made through willful ignorance or active deception.
Let’s look more closely at who will be healed and who harmed. In general, it will be well-off people who will be treated best, and the less well-off treated worse. If some anti-abortion language makes into the final compromise, men will be treated better and women worse; induced abortions are important to protect women’s health.
This is, politically and socially, the stuff of nightmare: the fuel of class and gender warfare. I am reminded of the housing policies that were enacted after the Second World War: which, a generation later, contributed to inter-racial violence, and in the following generation, abandoned city centers.
It seems likely to me that these problems will be made worse in the coming decade, rather than better. The unindexed excise tax on high-quality health insurance will probably reduce the overall quality of care. Anti-abortion activists, having had one success and, probably, a sympathetic Supreme Court, will attempt to expand their control of women’s bodies. The insurance companies will be looking for any way they can to avoid their contractual obligations.
Emma, again:
Is beating the insurance companies the only thing that matters?
Beating the insurance companies matters to me only because they will continue to work to find ways to circumvent the very loose restrictions of the proposed law. They are already acting in bad faith. The victory they have had in the Senate is likely to embolden them; they will not reform. It is not, generally, wise policy to give someone who abuses power more power, and, given the mandate, it will take extra-ordinary circumstances to repeal it.
So these are my concerns. It seems to me that we are already on the road to hell. The question is how to get off it.
[Obama] and the Dems could have mitigated the rest of it by not planning a strategy based around disappointing the base and cutting deals with industry. It still would have been ugly, but I suspect that if the president and the Democrats had crafted a solid message and he had personally worked harder at keeping public opinion on board they would have had an easier time of it.--***
And now, live from Washington DC, it's Barry Obama's Let's Make a Deal!I'm sorry, it just slipped out...
The Democrats are going to get the blame for the huge charges the bill imposes. Even though the bill probably will lead to an improvement in the quality of life of many Americans in the short term, the negatives will expand in the public mind, and the public will resent the cost. It will be seen as direct proof of government corruption. People who personally know people ruined by the mandates will speak their minds, and we may be sure that their voices will be heard. What will the public finally do, I wonder?
Well, they're going to be ornery, that's for sure. The US public hates and ignores politics, mostly. But this is politics that will push directly into their lives and cost them money: the public will both resent the demand on their attention and the thing itself. I think the loser here will be the Democratic Party, since this bill is their bad work. But I don't think the Republicans will be winners—the public has by now figured out that Republican politics are even more corporate than those of the Democrats. Since the largest group most directly affected by the mandates is young, there will be plenty of energy among the opposition. I don't think they'll just stay home, so I suppose this means the emergence of a reform movement. This could lead to greater social justice, or the movement could be hijacked by the radical right, or even stranger political factions that have yet to emerge. An even more powerful coalition would emerge if strong anti-abortion language is in the final bill; a large number of older women would join. Young people and older women are the coalition that elected Obama. I think there would be little such a coalition could not do.
Croak!
[minor changes made on day of publication and one clarification added the day after]
There are some differences:
I think it's poison.
[weasel word removed on day of publication]
Croak!
It would reinstate the provision of Glass-Steagall requiring the desperation of investment banking from commercial banking. ***Er, shouldn't that be "separation?"
Then again, maybe not.
And it isn't there, now, for many more progressives. I've been croaking and croaking about this for years. They just couldn't hear it. But now some are beginning to see it for themselves. Any US political party has to have both a leadership and a base--the people willing to go out and canvass, to stuff envelopes, to work registration campaigns, and so on. The conservatives, now the wingnuts, are the Republican base. And the liberals, now the progressives, are the Democratic base. Without the base the party cannot win. This turns out to be so even in these media-saturated days. And with the Senate "health" "care" bill, the Democratic leadership has abandoned its progressive base. Where will they turn?
[Edits on day of publication for clarity & fewer weasel words.]
I am struck that my analysis of three months ago applies with greater force than ever to the likely Senate offering:
Personally, I suspect we'd be better off waiting until the conservatives suffer more losses. This is so toxic that I don't even want to reluctantly support it. On the other hand, since the conservatives are going to suffer losses anyway, it may be that it will be easier to improve the plan down the road.
The California budget disaster is a result of gaming the California electoral system, not the will of a majority of Californians. Prop 13 was passed by 18% of California's population in the off year of 1978. Even of registered voters, it only got 45% of the vote. The tax cutting is not the will of the majority of Californians--never was. Such laws do not usually pass with even a majority of registered voters, and probably would not even pass in Presidential election years, even counting only that percentage of voters who turn out. So don't go blaming the citizens of California. Don't tell me they deserve it, or asked for it. An overwhelming majority never asked for any such thing.
The most shocking thing is what Geithner said about the change - he said it made the bill better. Remember, the plain-vanilla requirement is something that came from the draft legislation that he sent to Congress. […] nothing, I repeat nothing, explains his cheering on the elimination of something he asked for. He should have complained about it, if for no other reason than to combat the mounting suspicion that he has no backbone.I think it likely Geithner's backbone has been broken. In economics and finance, the Obama administration is starting to resemble the Reagan and Bush II administrations in the way it destroys reputations: Geithner will have no credibility by the time he leaves office. Think of the way Lyndon Baines Johnson broke Humphrey.1 Think of what Reagan did to Stockman. This is court politics, the way power has been deployed in aristocracies throughout history. I'm suspecting Summers and Emanuel of doing the dirty work. Summers in particular strikes me as a better-educated male version of Sarah Palin, and, like Palin, I think he loves to break people, but he would not have broken Geithner without Obama's support.
So, have you enjoyed the debate over health care reform? Have you been impressed by the civility of the discussion and the intellectual honesty of reform opponents? If so, you’ll love the next big debate: the fight over climate change. ***I think I am going to award Krugman the Raven's "Croak of the Times" award & stop giving him "Croak of the Day" on the grounds that I may never give it to anyone else if I don't.
As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. ***Yet further down in the article, Krugman writes:
Meanwhile, saltwater economists, who had comforted themselves with the belief that the great divide in macroeconomics was narrowing, were shocked to realize that freshwater economists hadn’t been listening at all. Freshwater economists who inveighed against the stimulus didn’t sound like scholars who had weighed Keynesian arguments and found them wanting. Rather, they sounded like people who had no idea what Keynesian economics was about, who were resurrecting pre-1930 fallacies in the belief that they were saying something new and profound.This is ideological, rather than rational, opposition. Let me take a little digression into cognitive science to explain something about distortions of reasoning. If you put a VR headset on someone and have them walk around then (before VR sickness sets in) they can interact in a computer-synthesized space. Unless, that is, the ground they are on is sloping. In which case they will, quite unconsciously and without visual cues, drift down-slope. And this is how it is that ideology and, yes, money influenced the economic profession. The claims of rationality were, for the freshwater economists, only the rationalizations of status-seeking behavior.
I am truly sick of health insurance being compared to car insurance. I can choose not to own or drive a car - which absolves me of needing car insurance (in fact currently I don't even have a drivers license). I don't think I can choose not to have a body, at least not while being alive. --"alymid" on LiveJournal
[Edited for clarity and to remove some swearing.]
Need I say that most US elected officials fail of this standard? If they were doctors, lawyers, architects, 3/4s of the Senate would be forbidden to practice. Many would be facing charges.
If there is a key problem of mass democracy, it is how to elect officials that take their responsibilities to their constituents and their country seriously, and seek to discharge them honorably.
The Satirists & Surrealists Union has collectively thrown up its hands and gone off to slug brick walls. Hurts less.
& this is post 100. I'm astonished. I hope a few minds have been changed.
[Title changed from "Post 100" to "Croak 100," because I like it better. Markup corrected to insert paragraphs where I meant to put them.]
I think your former Senate colleagues are trying to do that to you. There is an important difference, of course: you are President. But you still need the Senate, and the Senate is heavily conservative. Like a working House of Lords, the Senate is an organization of the powerful, mostly men, mostly white. Long-term relationships (you know) are formed there. And, as in any aristocratic body, personalities matter.
It looks to me very much like some of your Senate colleagues, who you thought were friends and mentors, were setting you up, pretending to be reasonable and willing to compromise when in fact they were just getting you to stand still while they sharpened the knives. I think you've been betrayed and, with the opposition to your health care proposals now becoming visible, the knives are out.
These men are very skillful liars who have used your rhetoric of reconciliation. You wanted to believe in their integrity and so you did. But your opponents in the financial system and the health care system don't want reconciliation. They want it all, and even when they get everything they want, they want more.
Your choices as President are made on behalf of all Americans and, sometimes, all the world. You have a huge choice before you: you can maintain your connections with your false allies, or you can turn to the people. You cannot reconcile your wealthy, greedy, violent opponents to anything less than unlimited power: if you stay with them, they will sabotage your dream of reconciliation.
However you can reconcile some of the conflicts within the American people.
In my view it is important to discredit the right-wing crazies. They swing the vast majority of independent voters. While in a year or two most of the craziness will be forgotten, and the independents thinking differently, they are affecting the Congress now. I want you to succeed! I think it best to answer these people with incontrovertible truth, and keep on answering them until they are reduced to shouting in dark corners of the media space.
In the public sphere, also, I wish you would reconcile with ideological progressives. They were shut out of your campaign, for whatever reasons. But now you need them, because they're sane people who will support you, and will support your policies if you offer them policies they can support. They are capable of loyalty, something your conservative allies have shown they are not. You cannot make alliances with the swing voters, because the swing voters are easily swung by conservative propaganda sources and you have conservative enemies. But you can make alliances with ideological progressives, because they stand for something, and if you stand for them, they will stand for you.
In the interest-group sphere, I wish you would look out for the big-money groups who are willing to make alliances with the radical right. What we have now is a situation where your seemingly-loyal conservative opponents like the insurance and pharmaceutical industries are openly allied with radical groups like FreedomWorks and Americans for Prosperity. These groups in turn have followings of violent radicals, who, like members of lynch mobs, are all too willing to come out when they whistle. The violent radical groups are deserving of some police attention, and so are the radical right groups; people who promote violent tactics have very likely committed crimes themselves. But look back at the seemingly-peaceful opposition, that will not dirty its hands: if the divisiveness is to be stopped, consequences will have to be brought back to them.
I hope you will continue to pursue the dream of reconciliation and change.
To Hel with 'em.
Where is there a US leftist organization where members can choose policy and goals and pick the leaders and managers? One that is not, like the old socialist parties, fighting the war not even of the 20th century, but of the 19th. I'd join a modern leftist party, engaged in modern leftist issues, in a trice. I think a lot of people would. And such an organization might even be able to make a real difference in policy.
I suspect Obama, and probably other Democrats, have been double-crossed by the "moderate" conservative leadership. Turns out they're not moderate after all, they just get other people to do their dirty work. The administration trusted big insurance, big pharma, and big medicine to abide by their deals, and not unleash the crazies. & here we are, crazies on parade. It is just like the big financial firms, who have undercut the administration's economic team.
With this near-revolt, the Obama administration and the New Progressives move into a new phase. I wonder what it is going to be like.
BTW, no, I don't think Obama has sold out. A deliberate sellout would not involve a proto-revolution.
[edited a few hours after posting--I like this version better.]
"For, without a cement of blood (it must be human, it must be innocent) no secular wall will safely stand."--WH Auden, Horae Canonicae, "Vespers."
[edited because I really like this title & to correct the Auden quote]
I think that, among the politically-aware minority of the population, we would find that the spectrum of the left extends further than it does in Congress. I think only a few radical-right commentators are ideological. Most use ideology as a weapon, but actually have group-loyalty or group-hate as motivations. The actual ideologues are probably the obvious ones: the late William F. Buckley, Grover Norquist, and so on. The most visible US radical-left figure I can think of is Noam Chomsky. He is a left anarchist and a moderate pacifist, widely reviled, and largely unknown outside the minority of the politically aware. Any national network that gave him a platform would come under enormous pressure to take it away again. Yet we are talking about someone whose program would be non-violent. We might also consider ecological radicals like Jerry Mander. Another pacifist and widely hated figure, and another advocate of non-violence. For a violent leftist you'd have to look for a Stalinist (are there any left?), Maoist, Trotskyite, or the like. And here, I am ashamed to say, I know no names.
Returning to the political spectrum, probably the farthest left the Senate goes is Barbara Boxer or Bernie Sanders and they're pretty moderate by comparison to Chomsky. Not sure about the House--there might be one or two authentic radical lefties in the 535. Be interesting to see if anyone actually has done the work & already knows!
Paul Krugman asks:
What I’d like to have is a Guttman scale of positions on political matters, such that almost everyone who gave the “liberal” answer to question 7 also gave liberal answers to questions 1-6, while almost everyone who gave the conservative answer to question 7 also gave conservative answers to questions 8-13. And we’d want population shares associated with each point on the scale. So we could then take known positions of public figures and place them on the scale: say, we might find that only 19 percent of Americans are to the right of Michelle Malkin, while 23 percent are to the left of Michael Moore.The problem is, it's been known since Converse's paper that no such scale can be constructed for the general public. It can only be constructed in parts of the citizenry who are politically aware, and Converse found that that was a minority, 11.5% of subjects, 15.5% of voters. The largest plurality of people, 42% of subjects, 45% of voters, in Converse's five-ranked classification system took positions based on understandings of group allegiances. So, for instance, Converse found a "socialist" who supported privatization of utilities! For the rest, people would answer poll questions, but their answers didn't correlate, so you'd get, for instance, people who (post-Converse example) support Medicare but are opposed to government-financed health care. The classic and horrible example, of course, is what we are seeing writ large in California, where people have voted for government programs and against the taxes that fund them. Many votes and positions are apparently made and taken at random, and change when the voters are consulted some time later.
There's more to be said about this: the intellectual response, the implications for democratic governance, and so on. I continue to be astonished that these nearly 50-year old results have drawn almost no attention outside of political science.
So what proportion of Southern whites doubt that Obama is an American citizen? While Ali did not release the racial breakdowns for the the South, and cautioned that the margin of error in the smaller sample of 720 people would be larger than the national margin of error (2 percent), the proportion of white Southern voters with doubts about their president’s citizenship may be higher than 70 percent. More than 30 percent of the people polled in the South were non-white, and very few of them told pollsters that they had questions about Obama’s citizenship. In order for white voters to drive the South’s “don’t know” number to 30 percent and it’s “born outside the United States” number to 23 percent, as many as three-quarters of Southern whites told pollsters that they didn’t know where Obama was born. ***Which means...? A long-term filibuster of anything useful from the Administration? In these times that would mean economic and health-care inaction. A Klan revival? Another impeachment?
I suppose seccession is not out of the question: a South including Texas would be a respectable oil-producing state. I wonder if it would join OPEC.
[later thought]
I suppose this is the last stand of the reactionaries. It's natural that it would come in the South. But how do progressives, or even moderates, respond?
[still later...]
Moderates, if we are to judge by recent history, simply will not respond at all, and let the resurgent South roll over them. Which leaves the progressives.
[Spelling error corrected on 2009.08.04]
The case was defended on the squarest, most idealistic, and most foolish level imaginable, and on the other side the dirt was so filthy that the defense refused to believe it existed, or, as in my case and probably in others, actually believed it. — Kenneth Rexroth, An Autobiographical Novel, p. 199. The events described apparently took place, if at all, in 1924.Doesn't this sound like the liberal or progressive response to the disaster of the reactionary right? People didn't engage the dirt, didn't fight it, and didn't understand why they lost the elections. Any all the while, the media were taken over, the financial system destroyed, and, ultimately, the USA fought a pointless war.
[pointless croaking complaint deleted — it's amazing what being less sick does for one's critical sense]
[...] the excesses of the Bush administration, the war, the torture, the wiretapping, were the result of compromises between the sociopathic Cheney faction and the merely dull and incompetent remainder of the administration, including the president. ***
[2009.08.04 edited for clarity]
And so the budget drama hurtles toward its inevitable conclusion, perhaps as soon as tomorrow. Democrats have caved and given Arnold Schwarzenegger what he wanted - a cuts-only budget that does massive and lasting damage to the state of California, to the people who live here, and to our collective future. It's taken 31 years, but Howard Jarvis is finally going to get the wholesale destruction of public services he always wanted.David Dayen chimes in:
We'll see a big sigh of relief from lawmakers over the next few days that will be wholly unwarranted. [...] One of the major consequences of this cuts-only budget will be, paradoxically, higher costs for individuals and the state.When grandmothers start to die, when the roads fail, when fires go unfought, the public will at last know out what the California state government once did for them. And the state will be unable to fund any response a major natural disaster, like an earthquake or a huge storm.
So it's 1931 in California. What will the public do? One thing that they probably won't do is turn out to vote Democratic. The Democrats in the state legislature scarcely put up a fight. There's nothing in their leadership to inspire confidence, trust, or energy--why would the voters come out for them?
Look back to 1932. Marches, riots, radical parties. That's California's future for several years to come. Followed, I suppose, by reform. But the state's credit will be wrecked, and the government's ability to hire--especially the public schools ability to hire--will be impaired. It's going to be at least a decade before the state will be anything like normal, and meantime, it seems likely any recovery will be late.
Krawk!
And let’s be clear: both the president and the party’s Congressional leadership understand the economic and environmental issues perfectly well. So if we can’t get action to head off disaster now, what would it take?***A damn good question, and I wish I knew the answer.
Perhaps he had also always known, somewhere in the deepest recesses of his mind, that he would indeed eventually take that last step into Satanism, but if so, he had very successfully suppressed it.*
In the stunned shock that followed the murder of Dr. George Tiller, I found myself reflecting on Christian morals. Jesus, it is said, died for our sins, and since that was first said his followers have taken willing self-sacrifice as one of their models of virtue. To go from the willingness to give up one's own life, if that is what is needed, to the willingness to kill, is a complete inversion of a core tenet of Christian belief. It is as if, somehow, the murderer (apparently a violent psychotic) had decided that god's love and god's law were not powerful enough, and so turned to Satan. He is not alone, of course: he took seriously the claims of the various radical sects that Dr. Tiller was a mass murderer and so he believed that he was doing god's will. But the Christian teaching has always been self-sacrifice, not violence against others. It was that which, finally, won Christianity its moral authority.
I've said in other places that I think Christianity--and many other religions--has fallen out of touch with our world. Apparently its more radical followers think so, too, and so they are turning to what they call evil. There is even one church, in repudiation of another Christian tenet, that is advocating weapons ownership. If they give up their ancient sources of moral authority, what is left to them?
Well, why not? The Republicans are a rump party--they're not willing to move to the left, and the right's discredited itself. They're so far out of power, they're never coming back. So lets move in on the left side of their turf!
The movement, Xeni, the movement. This is a political movement. That's what I'm asking if you trust. Will it lead to justice, or will it instead provide an excuse for the military and the police to step in and "restore order?" Or even, is it being nurtured to provide an excuse for that?
It is easy to cry, "¡Viva La Revolucíon!" And in all of Latin America, not only Guatemala, there is 500 years of injustice to revolt against, so there is always a reason for La Revolucíon. But to win... In Mexico, the liberator Juarez was followed by the corrupt dictatorial Diaz. Zapata and Villa won their battles, and were assassinated. It is not different in Guatemala--aren't you making that point?
There are some hopeful signs here. One of the most hopeful is the non-violent activism. My heart goes out to the people of Guatemala. But for a movement to succeed in Latin America, it needs courage, strategy, political theory, broad-based support, and ethical leaders. So far (admittedly there is little reporting) I just hear "¡Viva La Revolucíon!" It isn't enough to get out into the streets--you've got to go somewhere better once you're there.
[2009.08.04 Edited for clarity and force]
Does anyone remember the case of H. Rodgin Cohen, a prominent New York lawyer whom The Times has described as a “Wall Street éminence grise”? He briefly made the news in March when he reportedly withdrew his name after being considered a top pick for deputy Treasury secretary.Bottom line: we're still not desperate enough to get the policy-makers to act. Has there ever been a time in US history when the Senate was not corrupt and obstructionist?Well, earlier this week, Mr. Cohen told an audience that the future of Wall Street won’t be very different from its recent past, declaring, “I am far from convinced there was something inherently wrong with the system.” Hey, that little thing about causing the worst global slump since the Great Depression? Never mind.
Those are frightening words. They suggest that while the Federal Reserve and the Obama administration continue to insist that they’re committed to tighter financial regulation and greater oversight, Wall Street insiders are taking the mildness of bank policy so far as a sign that they’ll soon be able to go back to playing the same games as before.
So as I said, while bankers may find the results of the stress test “reassuring,” the rest of us should be very, very afraid.
Xalapa, Veracruz--From December 2008 to March of this year, 500 people from the town of La Glora in the sub-county (municipio) of Perote, have presented respiratory illnesses. Among these cases were two deaths from pneumonia, said the subdirector of Prevention and Control of Disease of the Secretary of Health and Welfare, Alejandro Escobar Mesa, confirming the rash of respiratory illnesses in the stated locality.(original article)Nonetheless, the governor [of Veracruz] Fidel Herrera Beltrán denied that the mountainous municipio of Perote was the birthplace of the lastest outbreak of porcine influenza and he reminded people that this illness is found in Asia.
In a message from the state Capital, he clarified that the origin of the porcine influenza is in Asia, so it cannot be related to the factory farming of pigs in Perote.
"[The virus] is found in Asia, in China. From there it came, via travelers to North America. Certainly from there it went to the D.F. and the State of Mexico. There is no connection with the factory farms in the valley of Pertote", he stated, and denied that the porcine influenza has any relation to Granjas Carroll, which operates in Perote.
Equally, the pig farming business, stated that none of its workers, nor any of its more than half a million pigs have shown any signs of influenza. [Pigs can be healthy carriers--The Translators.]
The company, which operates in the Mexican states of Puebla and Veracruz, clarified that they have no records of outbreaks of porcine influenza in any of its 907 workers, not in their over 60,000 pork bellies, nor in their over half a million pigs.
The official report states that the virus is found in people not linked with pig farming, that is to say, they have never had contact with the pigs. "From which we may conclude that the contagion is human to human."
The SAGARPA [Mexican Dept. of Agriculture] inspector for this region, Octavio Legarreta, stated that at the end of the week he had the valley of Perote inspected with special attention to La Gloria; no pigs with porcine influenza were found.
Nonetheless Escobar Mesa, the Mexican Secretary of Health, confirmed a rash of "respiratory illnesses" in this region. Of the 500 reported, two were influenza, one porcine influenza, which is the first case in this municipio, reported last Sunday.
"Only two cases of influenza, one type A and one type B," he clarified.
The thing you're not saying, prof, is that the wrong people are in charge. (Bet this doesn't get past NYT moderation, bah!) The bankers and economists who made this mess are still making the policy, and some--most?--of the bankers are corrupt and still looting.So the questions are: "Who are the right people and how do we put them in charge?"
Krawk!
I find myself wondering what the difference between Lawrence Summers and Sarah Palin is. And I think it's mainly that Summers is a well-connected white boy. But the stunning egotism is the same. Probably part of why Summers denigrates women is that they see through him: somewhere, inside, there's a greedy little boy. There's a whole article on testosterone poisoning in the financial system to be written, I think. Geithner, Summers: these people ought not be in charge of anything that matters.And surely Obama knows what they are. Got a bit of a character problem, there, man. I think Summers, at least, is headed for the door. The huge conflict of interest that the WSJ has revealed is likely to ultimately cost him his job. But is he going to be replaced with anyone more honest and competent?
America has become the most class ridden society in the Western world, far worse than Britian. Congressional seats are passed on to family members and friends like corrupt boroughs in 18th century England. The rich are bailed out and ordinary people left to sink. Responsibility is enforced on the least in society while the privileged are allowed to skate. Sell a gram of pot, go to jail; but kill hundreds of thousands in an illegal war and it's no big deal.--Ian Welsh at firedoglake
A while back, I linked Teresa Nielsen Hayden's article on Sarah Palin as a narcissist. And I got to thinking, well, what are the differences between Palin and Summers? There seem to be three: Summers is a guy, Summers is actually smart rather than just over-confident, and Summers is the trusted son of of privilege. But why would you put someone so arrogantly wrong-headed in charge of, well, anything? The answer seems to be that rich, well-connected people liked the way his theories supported their privilege. And now he is one of the most powerful economists in the world.
[Added] I suppose Summers dislikes women because they see through him. You hominids are sick with testosterone poisoning.
Krawk!
I quickly learned how fishy this world could be. A client I knew who specialized in auto loans invited me up to his desk to show me how to structure subprime debt. Eager to please, I promised I could enhance my software to model his deals in less than a month. But when I glanced at the takeout in the deal, I couldn’t believe my eyes. Normally, in a prime-mortgage deal, an investment bank makes only a tiny margin. But this deal had two whole percentage points of juice! Looking at the underlying loans, I was shocked.From Michael Osinki, who wrote some of the software that helped create the ugly financial instruments that have sunk the economy. He even makes my point that an "intelligent, articulate, pleasant fellow" can nonetheless have the ethics of a louse."Who’s paying 16 percent for a car loan?" I asked. The current loan rate was then around 8 percent.
"Oh, people who have defaulted on loans in the past. That’s why they’re called subprime," he informed me. I had known this guy off and on for years. He was an intelligent, articulate, pleasant fellow. He and his wife came to my house for dinner. He had the comfortable manner of someone who had been to good schools—he was not one of the "dudes" trying to jam bonds into a Palm Beach widow’s account. (Those guys were also my clients.)
"But if they defaulted on loans at 8, how can they ever pay back a loan at 16 percent?" I asked.
"It doesn’t matter," he confided. "As long as they pay for a while. With all that excess spread, we can make a ton. If they pay for three years, they will cure their credit and re-fi at a lower rate."
America's criminal justice system has deteriorated to the point that it is a national disgrace. Its irregularities and inequities cut against the notion that we are a society founded on fundamental fairness. Our failure to address this problem has caused the nation's prisons to burst their seams with massive overcrowding, even as our neighborhoods have become more dangerous. We are wasting billions of dollars and diminishing millions of lives.This took guts. It's a very risky thing for a Senator to do, especially a Senator from a Southern State. May it succeed.
Slacktivist. "Imagine a newspaper with no 'Business' section. Where the Business section is now, there is, instead, a 'Work' section."
Stirling Newberry, The Three Faces of the Left.
And eminent leftist economist James K. Galbraith, on how the (first?) great depression ended, and what the state could do, now, if there was the political will.
[added] Extra bonus world financial regulation advocacy (cue the black helicopters). Economist Joseph Stiglitz on global financial reform.
"If you only love those who love you, what is your reward? Even the tax-gatherers do as much."
You are judging people by their behavior with their friends and colleagues, and that tells little about their conduct with outsiders. You object that physicists are no more or less ethical than investment bankers. But physicists are not looting the global financial system. Why would I share your insider's judgment? I am not an insider; as tnh memorably said, "You're not a member, never will be." So why would I--why would any outsider--buy into bankers views of themselves?
I've no doubt that the bankers you know are mostly pleasant people to hang out with, if you are also a banker, if you are "one of them." But they are still participants in the looting of the global financial system. And memory is selective and malleable. Because you like these people, because you are one of the tribe, you remember less of their flaws than you would of a stranger, or an enemy. Outsiders see simply a tribe of looters, and you a member. If you want to change the world's view of your tribe, reform your tribe.
And, you know, you're a johnny-come-lately. Your erudition is not respected by the old timers, and they'll jettison you in a second if they think you might be a liability. You are not an insider, not really, not where it counts.
Krawk!
A reader writes in to complain about today’s column, in which I compared the supposedly productive activities of financial wizards to the sleight-of-hand of stage magicians.Although, I have a second choice:As a magician, he resents being compared to investment bankers.
What do you do if your previous organization — and the ideology behind it — has become inextricably bound in the public’s imagination to one of the worst foreign policy blunders in American history? Obviously, shut it down, and start a new organization with a new name.--Matt Russ
A bring-down for people who believe capitalists are Randian superheroes, isn't it? To be fair, Rand's heroes at least were genuinely productive and when they stopped their work, the world stopped. Not the case with most financiers. If these people had just gone on the dole, we'd all be much better off. I rather suspect there are people who really make the world work. But they're not usually the upfront, big names, and they aren't usually rich. If the people who make the world work got the money, Dennis Ritchie (operating systems), the Sutherland brothers (graphics), Grace Murray Hopper (programming languages), and so on would be the rich ones, and Bill Gates would be a successful salesman. Oh, the names I've metioned (and the many other computer scientists and people in other disciplines) have mostly done well. But, really, I know who's worth the money and it ain't Gates. So here's a tip, for the people who believe in people who make the world go around: they exist, but they aren't who you think they are, and money isn't a sign.
There's a new spending cap on the ballot in California. If it wins, it will limit budgets to a permanent too-low level until repealed. If this passes, California will not be able to pay its teachers, police, and firemen. (Oh, wait--it can borrow money to pay its teachers, thanks to an earmark.) Or maintain its roads and water system. It will be like a country under an embargo. Riots seem possible.
But then, riots may be what is needed to persuade the Senate conservatives to vote for the needed economic measures. It seems plain that these people's sense of entitlement will protect them from any real response to their constituents. So far the various treasuries and central banks are not doing enough. Of the US Treasury Paul Krugman writes:
And the insistence on offering the same plan over and over again, with only cosmetic changes, is itself deeply disturbing. Does Treasury not realize that all these proposals amount to the same thing? Or does it realize that, but hope that the rest of us won’t notice? That is, are they stupid, or do they think we’re stupid?Prof, it's a lot worse than that. We don't exist to them. Lawrence Summers is so devoid of empathy he lost the presidency of Harvard by insulting the intelligence and competence of more than half the human race. Their fellow senior bankers, the people they meet at the country club, their friends and social circle--these are real to them, and the men more than the women. (And Jewish boys from Long Island who grew up reading history and science fiction and go on to win Nobel prizes in economics definitely don't exist.) The whole rest of the world just doesn't register. They are like blocks at the top of the pyramid, proclaiming that they are self-supporting.
I don't believe these people are in any meaningful sense reachable. It's just possible that Obama will persuade them to try something different but more likely that change will only come after disaster on the national scale. Remember that nothing has dented the conservative coalition in the Senate: not losing a war, not the collapse of the economy, not the dismal failure of response to Katrina. They are convinced that their personal power trumps reality, and their social circle supports them in this belief. I do not think the people in charge of Treasury [and the Federal Reserve are] is so very different. [2009.03.21: But it turns out that I was wrong about the Fed; the head of the St. Louis Fed agrees with Krugman.] But change is coming.
What, therefore, is the role of intelligent and informed people--intellectuals--in this time? (Our role, of course, is whatever we choose, and whatever we can do.) But what might we choose that role be if we want to come through the onrushing disaster not completely impoverished and contribute to setting the USA straight?
It’s refreshing to have someone ask about the data before they write about it.--Bill Chapman of the University of Illinois’ Arctic Climate Research CenterReported by Carl Zimmer in his Discover blog.
Republicans are starting to actually be blamed for their own policy ideasKrawk!
This sucks. Hmmm, maybe they're the other kind of Hoovers after all.
Krawk!
things are so bad that the summarized musings of central bankers can keep you up at night--Krugman
Krawk!
A President who was a progressive firebrand would have to declare himself emperor to implement progressive policies in a country where the majority of the Senate is conservative and the Democratic House leadership is also conservative. Progressives now need to focus on Congress: on electing more progressive Senators, and on getting the House Democratic leadership to properly represent the progressive House Democratic majority. It begins to appear that Pelosi has noticed she represents one of the most progressive districts in the USA. Good, that's a start, but let's keep pushing. But, the Senate. The Senate is a problem. We need to focus on the Senate for 2010 (and 2012 and 2014 and...)
What is this? Hope from The Raven? But yes! Krawkkrawkkrawk! W. Bush and his administration were barriers to change. They are gone, and now there is a clear direction for progressive political action. Krawk!
My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.--Krugman, "What the Centrists Have Wrought"Remember, that's just the cuts from a bill that was too small to begin with. The total difference in jobs between doing enough and not doing enough has to be in the millions.
Here's Krugman on the amount of the stimulus:
what’s coming out of the current deliberations is really, really inadequate. I’ve gone through the CBO numbers a bit more carefully; they’re projecting a $2.9 trillion shortfall over the next three years. There’s just no way $780 billion, much of it used unproductively, will do the job."--Krugman, "Happy Stan"Extra bonus snark, on the banking plan:
Question: what happens if you lose vast amounts of other people’s money? Answer: you get a big gift from the federal government — but the president says some very harsh things about you before forking over the cash.--Krugman, "Bailouts for Bunglers"
Krawk!
"In a closely watched case involving rendition and torture, a lawyer for the Obama administration seemed to surprise a panel of federal appeals judges on Monday by pressing ahead with an argument for preserving state secrets originally developed by the Bush administration. [NYT]
The Raven is likewise astonished. One may reasonably explain the better-than-nothing stimulus plan by pointing to the conservative majority in the Senate, and perhaps even Geithner's rumored no-oversight gift to the corrupt banks as well. But actions of the Justice Department are entirely actions of the Executive, and there is no door other than the nation's Chief Executive at which they may be set. Now, it is possible that this is strategy: that the Justice Department intends to lose this case. But if that is so, it's a very risky strategy. What if a conservative court grants the defense?
But, croaks the Raven, I don't think that where it's at. It looks to me like a bargain was struck with the criminals of the Bush administration, just like the bargains made with other corrupt dictators who have been forced, finally, to leave office: defend us, let us retire, and we will go quietly. Frankly, I'm astonished. These people have already "left" public life. Unless they are punished, they will return again, or their next generation. I don't want to see another pointless war of aggression, I don't want another great depression, I want my civil rights back, I want all these things for future generations as well. There is also an ethical problem: this is corrupting. If the biggest criminals get off, what reason is there for the rest of us to toe the line? Corruption breeds corruption. And what are we going to do when the Arab/Islamic world decides that, under the Bush doctrines of enforcement of national laws internationally, they can deal out justice against these people within our own borders?
